Whether facing a shareholder demand, considering a large transaction, or launching an internal investigation to uncover and remediate alleged wrongdoing, creating a special committee of the Board of Directors of a company to direct the investigative process can be critical to a successful, independent resolution.
For example, in the context of a derivative action, a thoughtfully constructed special committee allows the board to ensure its fiduciary duties are efficiently discharged and that any demands are addressed to the satisfaction of the court and the company’s shareholders. In the context of a corporate transaction, a special committee enables a company to successfully close deals involving possible conflicts of interest. And, when investigating other claims of corporate wrongdoing, a special committee can help protect companies and board members from government inquiries and follow-on litigation.
